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Feb. 19, 2025 02:03-02:50 - CSPAN
46:55
Washington Journal Scott Paul
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pedro echevarria
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rollye james
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pedro echevarria ▲ ● ▼
This is Scott Paul joining us.
He's the president of the Alliance for American Manufacturing here to talk about the state of manufacturing, particularly with new initiatives from the Trump administration.
Good morning to you.
unidentified
Good morning, Pedro.
Great to be with you.
pedro echevarria ▲ ● ▼
How is it best?
How do you describe who you represent to people?
unidentified
Yeah, we're pretty unique in Washington.
We have the steel workers, the United Steelworkers Union, which is North America's largest industrial union, and domestic manufacturers who have steel workers in their plants.
And so it's a select group and in mostly what I think people would call heavy manufacturing, very domestic-oriented.
And we've been around for about 16 or 17 years now.
pedro echevarria ▲ ● ▼
As far as those who represent, how would you describe the state of the steel industry?
unidentified
Well, the state of the steel industry, I would say, is stable, okay?
Not great, not horrible, but stable.
And, you know, in a lot of ways, that's pretty good because it had been in freefall for several decades.
And so there have been some developments in the economy lately, the infrastructure money, there have been tariffs in place on important steel since 2018.
So there's been a fair amount of stability in steel, whereas in the decades prior to that, it had been just on a pretty downward trajectory.
pedro echevarria ▲ ● ▼
Do tariffs, how much do tariffs lend to the stability or instability of the market, the steel market?
unidentified
Yeah, well, when it comes to steel or aluminum or kind of commodity materials like that, they can be extraordinarily helpful.
And the reason is this.
You know, we're a big steel consumer in the United States.
We don't supply all of that market from here at home.
And our market is generally very open to imports.
The challenge has been, particularly with China, is that you have these massive firms that are owned by the Chinese Communist Party that have dominated the steel industry.
They make more than half the world's steel now.
They can't possibly consume all of that at home.
So that ends up somewhere else.
Again, not necessarily a problem, but the problem is that they're going to sell it at bargain basement rates, unfairly traded.
It doesn't reflect the actual price of even making the steel sometimes.
And that drives other firms out of business.
And so we saw that happen in the United States about 15 years ago, and it was devastating to the steel industry.
And so that's why you have this need for tariffs so that you have A support level of steel in the United States that can satisfy the rest of our manufacturing needs and that it doesn't get any lower.
We're down to the point now where there's a couple of kinds of metals where there's only one or two plants that make it.
That didn't used to be the case at all.
But that's left us pretty vulnerable.
And so, you know, what we've said is: look, look, we can't go down any further.
It would be detrimental to national security.
pedro echevarria ▲ ● ▼
You probably saw this question coming.
So, when the president says I'm going to put tariffs on steel and aluminum, exactly what does he mean by that and how does it work?
unidentified
Yes.
And so, I would, first of all, characterize this as a restatement of policy because there's a couple of layers to it.
Over the last couple of decades, there have been some tariffs put in place on some steel that has been what we would call unfairly traded, which is what I just described.
It's very selective, depends on the country, depends on what the problem is.
In 2018, President Trump utilized one of the aspects of trade law called Section 232.
We get into all this trade jargon, but basically, it means I can impose tariffs if there's a national security rationale.
And he did that on steel and aluminum in 2018, 25% for steel.
The issue was there was a process put in place to exempt a whole bunch of different products, thousands of them, as a matter of fact, and exempt some countries from that as well.
Now, what has happened over the last six or seven years is that you have seen those imports creep back into the U.S. market, and so that relief didn't was no longer as effective as it once was.
And you've seen some surges in steel come from Mexico and from Vietnam and some other places, not necessarily China, but it's like whack-a-mole.
It's working its way around.
And so, this is basically pressing the reset button on those tariffs and saying we're going to start this over again at the 25% level with all countries and all products.
And you're going to have to work very hard basically if you want to get an exemption or an exclusion to that.
And aluminum, which had also been covered at 10%, that's rising to 25% as well.
All of this is scheduled to take effect next month in March.
pedro echevarria ▲ ● ▼
So, for those who depend on steel for manufacturing in the United States, what happens to the price they pay or ultimately the price they charge for the things they make?
unidentified
Yeah, it's a good question.
Obviously, it depends on what the demand is as well.
And what we learned from the last round of steel tariffs is that a net effect at the end of it is that because of currency devaluation and some other things like that, there was not a lot passed on to the end-use consumer.
And let's think about, let's take an automobile as an example here, okay?
Because I think there's a lot of steel in an automobile, but the actual price component of steel in an automobile is pretty low.
And so, it's impacting a very small percentage of that price of an automobile.
So, that doesn't necessarily need to be passed on to consumers.
And what we found with the last round of tariffs is that there was an ability to renegotiate some manufacturing contracts, there was the ability to seek some efficiencies, there was part of this currency devaluation that really meant there wasn't a large price impact.
And I will say, I would go talk to audiences of steel consumers, and I would defend the tariffs, which is not an easy thing to do.
And I will tell you, Pedro, the principal complaint I heard is that I can't find enough workers.
I'm still hiring.
I can't find enough workers.
I can find a way to deal with the steel tariffs if there's a transparent process and I know what it's going to be, but I'm still struggling finding workers for my factory.
pedro echevarria ▲ ● ▼
Scott Paul with us, and if you want to ask him questions about manufacturing in the United States, particularly in light of tariff policy and other issues, 202748-8001 for Republicans, 202748-8000 for Democrats, and 202-748-8002 for independents.
You can text us at 202-748-8003.
Post on the social media sites as well.
What about the idea of retribution by these other countries?
And what does that ultimately do for the price of steel?
unidentified
Yeah.
Well, I mean, there was some retaliation to the tariffs.
And let's be clear, it's not only the steel and aluminum tariffs.
There's a lot of tariffs, as you know, with respect to China and other potential tariffs down the road.
What we saw the last round is that there was some retaliation, but Congress and the administration put into place some mechanisms to compensate the domestic producers for that.
I would anticipate that there'd be a similar mechanism this time.
I would also say this: you know, people talk about trade wars, and it's a little more complicated than that because there's differing trade tariff rates, trade disagreements that happen all the time.
And so I know it's a catchy headline, but that doesn't really capture the truth.
But here is the truth.
We're the largest consumer market in the world.
We consume 20% of the world's products, even though we're 5% of the people.
We know how to consume.
Our market is generally very open.
We actually are not nearly as trade exposed as a lot of other countries are that depend on their imports coming into the United States to generate national wealth.
And so we hold far more cards than any trading partner that we're dealing with.
And so we should not be afraid to utilize that.
I mean, we have more ability to escalate than most, if not all, of our trade partners do.
So it would be very dangerous.
And we saw this with the China tariffs as well.
And we may be talking about that.
But China decided when Trump applied the latest round, the 10% tariff, just to do basically a nominal amount, like to investigate Google, which doesn't do a lot of business in China, to reopen a case against NVIDIA and to do some very, very narrow tariffs that were much more of a symbolic than what we're doing.
pedro echevarria ▲ ● ▼
Push policy initiatives to get that done.
unidentified
Yeah.
Yeah, absolutely.
pedro echevarria ▲ ● ▼
When you talk about then assistance from the government, if these tariffs, if the tariffs do impact steel ultimately or other things, isn't that picking winners and losers then if the government gets involved to compensate?
unidentified
Not necessarily because fundamentally trade policy has been picking winners and losers over the years.
And the bargain we made is that we're going to give up market access and we're going to expose our manufacturers.
In return, we're going to have allies first in the Cold War and then hopefully with respect to China 25 years ago, that didn't work out.
And we'll also make gains in services and financial services and what have you.
What we've learned from all of this is that it's been very one-sided.
We have a trillion-dollar trade deficit in goods annually, a trillion dollars that we're bringing in more than we're taking out.
And we're a very entrepreneurial, innovative country, and we can be very cost competitive too.
And that's called a trade policy out of whack.
And so this is resetting it a little bit.
And traditionally, with respect to trade policy, there has been some compensation of people who have been impacted by trade.
It hasn't been generous enough.
But there's been a long history of that since the early 1960s in the United States.
So, again, that's not an unusual circumstance for our economic or trade policy.
pedro echevarria ▲ ● ▼
This is Scott Paul joining us, the president of the Alliance for American Manufacturing.
First call is from Akiva in New Jersey.
Republican line, you're on with our guests.
Good morning.
unidentified
Go ahead.
Good morning, Pedro.
Good morning, Pedro.
pedro echevarria ▲ ● ▼
Good morning.
You're on.
You're on with the guests.
unidentified
Paul?
Mike.
Good morning, Pedro.
Good morning, Representative Paul.
I have a question for you, Mr. Paul, and that is he's just a few, and that is, well, during the 2019 and 2019, they said we have the lowest unemployment rate in 50 years.
We will have taxes raised, and every middle class, or at least most Americans, will feel the pain and feel the impact.
And so, my first of two questions is: one, why do Democrats think taxes might go up, even though during the first Trump administration in 2017, 2018, 2019, the unemployment rate was low?
And second of all, during the first Trump administration, some alleged comedians, like Seth Myers, said that Trump had made things worse for some people, like farmers, Ohio and Pennsylvania, saying that they are having their things worse off because of tariffs.
Is that true, or is that a fabrication, or is that a lie?
pedro echevarria ▲ ● ▼
Okay.
Akiva, there in New Jersey.
Thanks.
unidentified
Akiva, very good question.
And I would say this: the question about passing along costs to consumers is an unsettled one.
There's a couple of ways that it could go.
I mean, if a tariff is charged, there's definitely going to be revenue collected, and it's going to be up to that company whether it passes along the cost to consumers, whether it absorbs it, whether it renegotiates contracts, whether it moves the manufacturing out of China to another country that's not impacted by tariffs.
There's all sorts of things that could happen there.
And it is true that the evidence based on that round of tariffs was that there was a negligible contribution to inflation compared to other things like energy costs or housing costs.
Now, I will say that doesn't necessarily mean that's always going to be the case.
If there is a universal tariff applied to every product everywhere, again, depending on what these companies depend to do, there could be some costs passed on to consumers.
And so I don't want to pretend like there is not a cost associated with this.
There certainly is.
There's also a cost of inaction, which is what I was describing: that we saw decades of erosion of our manufacturing base in this country, and that impacted millions of lives, hundreds and thousands of communities across the country, and put us in a national security position that is dangerously exposed.
And so, again, there's going to be a trade-off to this.
Think about it like the Cold War, where we built up the military in part to make sure that the Soviet Union couldn't challenge us.
And there was a cost to that because there were different priorities within our budget.
It took 40 years to see that come to fruition.
And so I don't expect that things are going to turn around with respect to China or any other country right away if we do some application of tariffs.
It's going to take some patience to do that.
But I would argue that it is worth the cost of having that national and economic security for the United States.
pedro echevarria ▲ ● ▼
By the way, viewers, if you work in the manufacturing sector and you want to give your thoughts there as well, 202748-8003 is the number to give your perspective on this topic.
Independent Line in Indianapolis.
Ishmael, hello.
unidentified
Good morning, gentlemen.
Good morning to you all.
Quick comment and a couple of questions.
A quick comment is: you know, tariff is very complicated.
With a different administration, rather Democrat or Republican, you know, they can't put those tariffs or lift those tariffs.
My question to Mr. Paul is: what is the long-term impact for tariffs?
And which sector of economy in our country will get direct hit that they will see that?
And then when we're going to sustain to be independent for steel manufacture in the future, those are the questions.
And I thank you very much for your time.
pedro echevarria ▲ ● ▼
College, thanks.
unidentified
Ishmael, great question.
And I would say, you know, Indiana is the largest steel-producing state in the country, so it's relevant to that state.
So again, what happens with respect to tariffs?
I don't want to get too much into history here, but for most of our history, we've used tariffs as an economic development tool and for some revenue collection as well.
It's less important for revenue collection now, but it was called the Hamiltonian model.
We'll put some tariffs in place, we'll build up our industry, we'll do some internal improvements, and we'll be able to develop economically.
And it is what made us the second industrial, industrialized country in the world after Great Britain.
And it is a model that Germany and Japan and Korea and many others have followed.
And so it is a very legitimate tool in economic policy.
Now, what happens in the 21st century with all of this, especially when we have all of these relationships and we've been bringing tariffs down over a number of decades?
And that's a really important question.
You know, honestly, with China in particular, and I'll answer it this way, because the question is very broad.
You know, we, you know, if you look at the goods that China supplies to us and that we buy a lot of, it includes Christmas and party decorations, but also smartphones and laptops.
And you can kind of laugh at the first one because we can probably source that from anywhere else.
But truthfully, it won't be the easiest thing in the world to shift laptop and smartphone production to other locations, much less to the United States.
Now, that's underway.
Some companies are doing it.
But that's where you could see a little bit of an adjustment issue.
Now, and again, with respect to steel, you know, we need a base capacity of steel in the United States to preserve our economic security.
And the tariffs are part of that guarantee.
We also need a healthy economy.
We need to be making investments in our economy.
And I think that's an important aspect that we can't lose sight of as well.
pedro echevarria ▲ ● ▼
When it comes to steel, how much comes from China, say, compared to Canada or Mexico?
unidentified
Yeah, well, these days, and in part thanks to the tariffs, we see less and less steel coming in directly from China, Pedro.
The challenge is that Chinese steel ends up going to Vietnam or to Malaysia and then coming to the United States indirectly, not necessarily subject to a full tariff.
And then we've also seen steel imports surge from Mexico.
There is a lot of North American trade in steel.
And our challenge is not with Canada.
There's generally fair trading relationships there.
There are some issues, but there's generally fair trading relationships there.
I think they are a little bit with Mexico because we have seen a surge of steel coming in, and I think the Biden administration recognized that too and was prepared to take some actions on it.
And so that's where you see a lot of the challenges.
pedro echevarria ▲ ● ▼
The former Deputy Prime Minister of Canada wrote a recent opinion piece for the New York Times, Christopher Freeland, and wrote this about Canada's perspective and all this, saying in 2018, Canada imposed dollar-for-dollar retaliation on $16 plus billion in Canadian dollars in U.S. steel, aluminum, and other imports, deliberately targeting products from red states like Florida, orange juice, and Wisconsin cheese.
Mr. Trump may not care about the objectives of people in Canada, but he does care about American workers and businesses.
If exporters feeling the squeeze from tit-tat-for-tat tariffs start calling the White House, the pressure on the administration to reverse course will grow.
What do you think of that perspective?
unidentified
Yeah, well, I mean, I think that from her perspective, that's probably the right argument.
I don't know that ultimately it's going to be a winning argument, and I articulated this before.
The impact of any trade measures that we would apply to Canada would have a massive impact on their gross domestic product because of the size of the economy there.
The impact of any trade measure that Canada could apply to the United States, yes, there might be some targeted impact, but it would not be felt economy-wide in any way, shape, or form, because our economy is too large.
And this would be a very, very small and select subset of it.
So if there were to be an escalation, I certainly hope there wouldn't be, Canada is not going to come out on this.
It's going to do a lot of damage to the Canadian economy.
It would have some impact on some industries in the United States, but it wouldn't impact our economy as a whole because of the size of the GDP that we have.
pedro echevarria ▲ ● ▼
Edward works in the manufacturing sector from Pennsylvania.
You're on with our guests.
Good morning.
unidentified
Good morning.
I would love to talk as far as about the machine tool industry.
Mr. Trump talks about bringing manufacturing back to America.
In order to have manufacturing, you have to have a viable machine tool industry.
And during the 60s, we did right after World War II.
But our worthy Congress, step by step, allowed people from not only Asia, but also from Europe to come in and basically butcher our machine tool industry in this country.
The machine tool industry was run by family organizations at that time.
And now, as far as we have nothing left, you talk about making more steel here in America.
Ween United, Mesta, all the large companies that made steel mills.
Matter of fact, they made them right here in Pittsburgh.
They're gone.
They're never coming back.
If you talk to Nucor, they would tell you that all the things that they're buying for their new plants is coming out of Europe, coming out of Japan.
We've lost it.
And I don't know how Mr. Trump expects as far as to build an industry, any industry in manufacturing, without a viable machine tool industry.
I appreciate your time.
pedro echevarria ▲ ● ▼
Edward, thank you.
unidentified
I agree with Edward completely.
I think that, I mean, machine tools are something that people don't see, but when you're in manufacturing, you know how important they are because they're the things that are in the factories that are, you know, that are helping to produce and convert raw materials into something that's useful up the value chain.
And it's true, we did lose a lot of that industry to Europe, to Asia.
But I will say that I think a couple things show that if we have a policy, we can do it.
And I think this is an ode to industrial policy, which gets a bad name sometimes, but it is highly effective.
Like we've had an industrial policy for agriculture, and that's why we still produce a lot of agricultural products in the United States.
The same goes for fossil fuels, whether you agree with the utilization or not.
It's been an effective policy.
We are producing more fossil fuel output than we ever have in the history of our country.
That was even before Trump took office.
Now, the last administration, the Biden administration, took that notion, applied it to semiconductors with bipartisan support in the Congress.
And so as a result, we've seen a rebirth of semiconductor, high-end semiconductor manufacturing in the United States.
There are a dozen or more factories under construction in the United States that are going to put us back into the semiconductor game.
And so I will say tariffs alone, not going to bring machine tools back.
But if you have tariffs combined with that sort of muscular industrial policy, it's quite possible to do it.
pedro echevarria ▲ ● ▼
Democrats line from South Carolina.
Jermaine, hello.
unidentified
Hey, how are you doing?
Good morning.
I got my original question answered, so I'm not going to ask that one.
I have another question.
As far as getting the steel from China and producing it domestically, speaking as a consumer, how is that going to help the consumer?
Would the price of goods that we buy that contains these products be cheaper, or will the prices remain the same?
It's a good question, Jermaine.
And it's important to understand that no one buys a ton of steel directly.
No consumer does.
But steel's part of other products.
And we used the automobile example before.
And even there's a lot of steel in an automobile, but in terms of the purchase price, it's a very small part of that purchase price.
And so, you know, and already most of the steel that these auto manufacturers are utilizing is coming from the United States or North America.
So it might not even be subject to a tariff, okay?
So there is very little that's passed on to the consumer there.
But I will say this, you know, if you believe that the overriding responsibility of the government is consumer efficiency, that gets you to a different policy point than if you believe it's the national security of our people.
And that is fundamentally what the government is supposed to do, is supposed to guarantee and safeguard our national security.
And so, again, I'm not going to pretend like there is no cost to this.
There could be some cost.
The question is, is it a cost worth bearing and how will it be distributed?
How much will these very innovative companies that can figure out all sorts of different ways to get more efficient, how much are they going to absorb?
How much are they going to pass along?
But it's worth it at the end because we're getting to the point where if, God forbid, we had to mobilize for something, we do not have the capacity to churn out the military equipment or the armaments in a way that we did, say, 50 or 60 years ago.
And that makes us extremely vulnerable.
pedro echevarria ▲ ● ▼
Does your organization represent U.S. steel?
unidentified
We do.
pedro echevarria ▲ ● ▼
I was going to ask you because we saw President Biden push back against the idea of Japan buying the steel and refurbishing it.
President Trump did the same.
What do you think about that hesitancy from the presidents on another country buying U.S. steel?
unidentified
Yeah, we haven't taken a position on that because we have stakeholders on every side of that issue.
I will say this, just, you know, we're at a point in time where it makes sense, no matter who it is, to invest in the steel industry of the United States rather than offload the assets like they were doing for the last 30 years.
And so the fact that there are investment that may be coming into steel from some source, I think is a good sign for the industry without stating an opinion on the purchase.
pedro echevarria ▲ ● ▼
What investments were the countries interested in making to U.S. Steel specifically?
unidentified
I'm sorry, say that again.
pedro echevarria ▲ ● ▼
What investments was Japan interested in doing if they were to buy U.S. steel?
How would they change that company?
unidentified
Well, I believe that they propose making $3 billion in investments as part of that.
I mean, there's other companies that have expressed interest in purchasing U.S. steel.
And in the past, you've seen, again, a lot more interest in investing in the steel industry in general in the United States because they see the United States market as being a good and a healthy one moving forward as opposed to the past where it was shrinking and shrinking because of the import penetration that was coming.
pedro echevarria ▲ ● ▼
Is U.S. Steel an outlier as far as the need for investment or are other steel companies in the same shape or same condition where they need outside investment to help improve their business?
unidentified
Yeah.
Well again, the difference is, you know, investment versus rescue or having a vulture come in.
And in the past it was a lot of mergers and acquisitions in steel and a lot of downsizing.
There was a wave of steel bankruptcies at the end of the 90s, the beginning of the aughts, where you saw more than 30 steel companies, some brand names, Bethlehem and others, that went out of business, just disappeared.
They had been part of the American landscape for generations.
And so that's not the situation that we're in.
But we also can't afford to take the tariffs off because that's where we would end up again, and we don't want to see that.
pedro echevarria ▲ ● ▼
This is Scott Paul joining us for this discussion.
He's the president of the Alliance for American Manufacturing.
Kathy is up next.
She joins us from Georgia.
Kathy, hello there.
Go ahead.
unidentified
Good morning.
I enjoy watching your show every morning.
And this one just sort of hit home.
I don't know if I'm asking, I'm not going to really ask a question.
I just want to make a comment.
I was born and raised in a small town in the Appalachian Mountains in Spruce Bine, North Carolina.
And even in high school, and I graduated in 1975, you could, I worked all through high school, a job.
I didn't have a choice.
And so I could go from one manufacturing plant to another to get a job.
We had hosiery.
rollye james ▲ ● ▼
And this is a small 2,000 population town.
unidentified
Hosi mills, blue gene factories.
Every major furniture builder, Henry Don, Ethan Allen, Broly Hill.
I mean, there was always some place to work up there.
And I was very fortunate, and I was able to go to college on a veteran scholarship.
And so I got out of there and got a better job.
But I had five brothers and sisters who lived up there.
And over the course of 20 years, this is in 1975, mind you, when everything was sort of rosy in little Spruce Bine, North Carolina, every manufacturing plant is gone.
Right now, they're ravaged by Halloween.
We lost every major furniture builder, the hosiery mills, the blue gene factories, everything.
The largest employer now is Walmart.
And I'm sort of whining, commenting, complaining, and just perplexed because I've seen my family suffer from it.
And many, many families in this little town in the mountains.
So if you can just shed some light on that, and if there's a chance that any of these jobs would ever come back to these little towns all across America, I guess I'm sort of looking for hope.
Is there any?
Kathy, I would say there is hope.
It's not going to look like it did in the 1970s.
But there is the possibility to attract new factories to communities.
It takes some policy to do that.
It takes a reversal of the free trade policies that we saw over the last couple of generations that led to the demise of manufacturing in these small and mid-sized towns in a wide variety of industries, as you articulated.
And it takes some investment in the skills of the workers and in innovation.
And again, we've seen some proof points where it can be possible.
And the idea, again, is not to reimagine manufacturing as it was, say, 50, 60 years ago.
That's not going to happen.
Things are much more automated now.
That doesn't mean there's not going to be good jobs.
And just to Kathy's point, when a Walmart comes to town, you're not going to get any other economic development.
It's not going to bring anything with it.
When a factory comes to town, you are going to get other things with it.
You're going to get folks who supply that factory.
You're going to get more activity at the hardware store, the grocery store.
You might even get a Walmart if you're able to attract a factory.
And so it is possible to do that.
And we've seen new factories come online over the last 15 years ago because reshoring has become more of a practice, less reliable coming from China.
And so you see more companies looking at bringing work back to the United States.
We just need to scale it up.
pedro echevarria ▲ ● ▼
This is Richard from Baltimore, Maryland.
He asked, what percentage of American manufacturing employs illegal workers?
And I'll expand that to the question of where does immigration policy fall into those you represent?
unidentified
Yeah, I would say that from a manufacturing perspective, it's not a problem at all.
In fact, it's part of the solution.
The immigrant workforce has been a massive part of the solution, particularly in a lot of these communities that have been hollowed out where the kids left seeking opportunity elsewhere.
And these family-owned factories are seeking workers.
And refugees, immigrants have helped to fill that void.
And they are not taking jobs from anyone.
There are 400,000 open jobs in manufacturing now.
It's not like folks are getting squeezed out here.
If you talk to any manufacturer, and I'm sure that a lot of them voted for President Trump, they will say that their workforce and having some refugees or having some immigrants as a part of that is going to be key to keeping them running at full strength.
pedro echevarria ▲ ● ▼
What are your employers doing to make sure that those that don't belong to the United States undocumented workers aren't working in factories?
unidentified
Yeah, well, I know our employers who are all steel worker represented.
I mean, there's a very deliberate process that workers go through for all of that, through trading and all the checks.
And so, again, it's not an issue, and it's not seasonal employment.
I guess this is the other thing.
It's not casual seasonal employment.
This is like this is shift work where you're there.
And so it's a completely different circumstance.
And actually, immigration, again, is going to be part of what it's going to take to see more employment in manufacturing.
pedro echevarria ▲ ● ▼
Let's hear from Russell.
He's in Winchester, Virginia, worked in manufacturing.
Russell, thanks for calling.
unidentified
Go ahead.
Good morning, guys.
Yeah, I've recently retired from an industry, and we had a really steel-intensive.
I'd like to go back and revisit the tariffs from the first time.
I think it was like a 20% tariff on the Chinese steel that was put down.
And I'm thinking while I'm working, well, this is a good thing because now we'll go back and start buying steel from Ohio again as we had before they made the switch to Chinese.
But then it was within a month, probably close to three weeks after the tariffs were instated.
U.S. Steel announced, well, we're going to up our prices 20%.
And all of a sudden, the manufacturing, expanding the customer base, all that was out the window.
Because no matter where you bought it, you were paying more.
All we did was put a surtax on it and send it on to our customers.
And it's just money that's coming out of people's pockets.
U.S. Steel had a chance to expand its cousin, expand its manufacturing base, but they chose, no, we're going to reward our shareholders.
All it does is cost the consumers more money.
Now, that's pretty much what I got to say.
Oh, and you were talking about us being a consuming nation.
We should import more because we consume a lot more than anybody else.
But whatever, and good luck.
And I think all this is going to do is just beat the inflation horse and feed it good.
pedro echevarria ▲ ● ▼
Russell and Virginia, thanks.
unidentified
Yeah, I mean, I think with, again, the evidence with respect to the steel tariffs is that overwhelmingly what happened is that these companies were able to make investments in their factories that have been deferred for decades because they didn't have the resources to do it.
And they modernized and they became more efficient.
Now, when steel prices go up, it's because demand is increasing.
Okay, it is a very demand-sensitive industry.
And so it goes up, and believe me, it comes down too.
And it comes down to a level where it costs more to make the steel than they can sell it for in the United States.
And that's what all the dumping from China and other countries did.
And so I do think that on net, it is well worth having the steel and aluminum tariffs in place to protect a basic level of production in the United States and to provide that stability into that choice.
And I would just say, I'd much rather have U.S. companies that are in competition with each other dealing with the prices than having these state-owned Chinese firms set the prices as well and being hostage to them.
I don't think that's a good position for us to be in.
pedro echevarria ▲ ● ▼
The caller made this point towards the end, but there's a viewer who sends us a text saying, Mr. Paul, what if we had a consumption tax?
Wouldn't it be a better way to reducing consumption and thus reducing the pricing of imports?
unidentified
I don't know.
It is the answer to that.
I mean, we do not have a tax system that's built on a consumption tax.
And so I think that's highly unlikely to have.
I mean, that's kind of the European model and something that this administration is very concerned about because they believe it also serves as a non-tariff tax on our imports going into Europe.
So I'm not sure that that is the answer.
Think just more balance in our trade policy would be a good starting point.
pedro echevarria ▲ ● ▼
Senator McConnell has an op-ed in USA Today.
He talks about trade and tariffs, particularly towards his state.
The headline says Kentucky can't afford tariffs in the trade wars.
But he makes this point saying trade wars with our partners hurt working people most, and the president has better tools to protect American workers without forcing our families and businesses to absorb higher costs.
He doesn't elaborate on those, but are there other avenues besides tariffs that could make up for ultimately higher prices for people?
unidentified
Yeah.
Yeah, again, trade theory is complicated, Pedro, I'll just say, and it's very unsettled.
But one of the things that we saw when these steel and aluminum tariffs were imposed before is that the value of the U.S. dollar went down a little bit.
And that actually, on net, makes the imports less expensive than they otherwise would be.
Now, does it negate the effect of them?
Not necessarily.
They can still be impactful.
But the idea behind the tariffs is that you're either going to generate the revenue or you're going to get the jobs back.
It's going to be one or the other.
I'd like to see the jobs come back, right?
I'd like to see the firms start to reshore more work rather than to pay the tariffs because that is an option for some of them as well.
But again, with respect to Senator McConnell, for his entire career, he has been a free trader.
And so it's not surprising this.
But I do think that he would agree that China has not played by the rules.
And so far, what we've seen in place from the Trump administration right now is a 10% tariff on Chinese products kind of across the board.
We've seen some steel and aluminum tariff announcements.
They'll take effect next month.
We'll see what happens between now and then.
We both know that things can change very dramatically here, but that's what we've seen so far.
pedro echevarria ▲ ● ▼
From Al.
Al joins us here in Washington Democrats line.
unidentified
Hi.
Hi.
Good morning.
I went to Georgetown in the late 70s, and I watched the demographics of the nation change overnight during that election of 1980 when Carter was drugged out and Reagan came in.
And I see something similar happen this most recent election cycle where overnight everybody is now in favor of the current administration.
I grew up in West Virginia.
I mean, my family was from down in coal mining country, and I saw the U.S. steel divest in the coal mining regions of the country.
So when that lady was just talking about North Carolina and manufacturing jobs, the whole state of West Virginia literally just dried up.
And I'm hearing drill, baby, drill, and I'm hearing all of this stuff, right?
But what I really guess I'm curious about is what are we going to do to bring America back, even with these dynamic election changes that we've seen?
And so I'll stand aside now.
pedro echevarria ▲ ● ▼
Al, thank you.
unidentified
Simple question.
How do we get America back?
Well, again, part of it is I think there has been a realization, and I think this is true.
I think this was true from the Biden administration.
I think this was true in the Trump administration, is that we have to reorient our trade policy.
Instead of just negotiating free trade deals and giving away market access, we need to demand a level playing field, and we need to be able to utilize tariffs as one of the tools for that.
I mean, keep in mind, and I'm just going to say this, you know, Biden signed a tariff proclamation to put 100% tariffs on Chinese electric vehicles.
Okay, so that is like, you know, so when progressives are like saying, oh, Trump's doing this, I was like, look, you know, Biden was doing some of the, this is a similar thread to trade policy here.
And I think it's a welcome one, but that is not alone the answer.
I do think we need to invest in our workers, our community colleges, our career and technical education programs.
We need to continue to be massively innovative.
We need to continue to build out our infrastructure and to explore all energy sources so that we have an energy advantage in this country for generations.
There's a lot that we need to do and that we can do, and I think we're well positioned to do it.
Now, in this Washington, can we get it done?
I'm not sure.
Like, there's, you know, it's a vote, you know, one way or the other.
So I'm not holding my breath.
But there is a pathway to kind of, to, to kind of get back that economic strength.
pedro echevarria ▲ ● ▼
AmericanManufacturing.org is the website for the Alliance for American Manufacturing.
Scott Paul serving as its president, as the president.
Thanks for your time.
unidentified
Trader, thank you.
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